Analyst Objectivity:
Managing the Research Process
The way firms manage analyst research has considerable impact on the validity and accuracy of the resulting reports. In order to ensure the independence, transparency, and objectivity of analysts' work, firms must avoid a reporting or compensation structure that might create conflicts of interest for analysts.
Firms also need to empower analysts to exercise diligence and thoroughness, providing a reasonable basis for investment recommendations or investment actions; to self-certify their work; to avoid material misrepresentations; and to keep adequate records to support their reports or actions.
Our work on analyst objectivity is based on our Research Objectivity Standards, which offer specific, measurable standards for managing and disclosing conflicts of interest and recommend specific practices to guide investment firms and their respective employees.
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Articles
- "More Analysis, Less Noise," CFA Magazine